![]() In Canada, elevated levels of household debt and high house prices remain two key interconnected vulnerabilities.The tightening of monetary policy globally will test the resilience of the financial system and could worsen existing financial vulnerabilities. The lasting effects of the pandemic on supply chains in the context of strong demand for goods and the ongoing Russian invasion of Ukraine are complicating these efforts. Central banks around the world have shifted their focus from providing pandemic-related stimulus to responding to the significant increase in inflation.The vulnerabilities highlighted in this report suggest the effects for the real economy could be significant if a trigger event occurs, even as systemically important financial institutions remain resilient. While the sharp increase in house prices over the past year has resulted in significant equity gains for many households, those who entered the housing market in the last year or so would be more exposed in the event of a significant price correction. These households are more vulnerable to declines in income and rising interest rates. The Bank is paying particular attention to the fact that a greater number of Canadian households are carrying high levels of mortgage debt. However, in an environment of tightening financial conditions, high global inflation and increased geopolitical tensions, financial system vulnerabilities have become more complex, and risks have become more elevated. ![]() The Canadian financial system has proved resilient throughout the COVID‑19 pandemic, and the balance sheets of businesses and households are generally in good shape. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |